State Rep. Robert A. DeLeo: GOP local aid proposal is not sustainable

Robert A. DeLeo

Monday

Dec 31, 2007 at 12:01 AMDec 31, 2007 at 8:53 AM

If you're an elected official, supporting America, motherhood and apple pie is probably the easiest position to take. A close second, particularly in Massachusetts, would be a public pronouncement of support for giving more local aid to cities and towns.

If you're an elected official, supporting America, motherhood and apple pie is probably the easiest position to take. A close second, particularly in Massachusetts, would be a public pronouncement of support for giving more local aid to cities and towns.

Elected officials on Beacon Hill all want to give more money to municipalities to help them pay for public education, city services and to help ease the tax burden placed on property owners. Supporting local aid is a good thing to do if you really intend to do it. However, serious harm can come from making proposals that purport to help cities and towns but, in the end, would leave them, and the Commonwealth, high and dry.

Republicans in the Massachusetts House of Representatives have filed a bill to distribute $450 million to cities and towns as unrestricted local aid. Sounds great. Sounds like something we can all support. But when you take a deeper look, what the bill would actually do is simultaneously set municipalities up for a major fall and deplete state reserves at a time when we truly need them.

The bill's sponsors argue this money is "owed" to cities and towns as funds that should have been distributed to them in the past. Although this argument alone has serious flaws, for the sake of discussion let's agree that we would all very much like to give cities and towns $450 million. That said, a couple questions must be asked of the bill's sponsors.

Where is the money coming from? The answer: The bill calls for the money to come from the state's rainy day fund. The bill's sponsors argue we can afford to take $450 million from our rainy day fund because we have a balance of $2.2 billion, and even if we make this withdrawal, we will still have $1.8 billion.

The problem is that the Lottery, which provides the revenue source for the unrestricted local aid that we give to cities and towns, is not performing as well as was hoped. The fact is we currently have a hole of at least $220 million to fill if we don't want cities and towns to suffer a cut in current local aid. That is, we have distributed $220 million more in so-called "Lottery Aid" over the past two years than Lottery revenue could support. That money will most likely have to come from the rainy day fund. Moreover, unless Lottery sales increase dramatically, we will have to keep filling that hole in the foreseeable future just to maintain level funding.

Most importantly, when the last recession hit Massachusetts, our rainy day fund was diminished from $1.7 billion to $366,000 in order to stave off the drastic cuts and/or tax increases that would have been necessary if we had no reserves to draw upon. In other words, it was the rainy day funds that provided some measure of stability to the local aid programs during the last economic downturn. The Commonwealth's ability to do the same next time will depend on the health of that rainy day fund when state revenue growth weakens or declines.

What happens next year? The answer: We either have to take another $450 million from the rainy day fund or hang cities and towns out to dry. If the state gives communities $450 million of unrestricted local aid, most will either use that money to hire police officers, teachers, or other municipal employees to strengthen local services, use it to lower or stabilize property taxes, or a combination of both.

That's great for year one but what about year two? In year two, assuming the state can't afford to take another $450 million from its rainy day or other funds, cites and towns that hired personnel now have to either lay them off or raise property taxes to pay for them. Communities that used the money to stabilize property taxes will have to raise them again. Communities' base-budgets cannot be built without providing a plan to continue the support in future years.

These issues and the problems they raise seem to be lost on Republicans who are only interested in portraying a political gimmick as legitimate policy in order to score points with the public. Don't be fooled. When it comes to the 351 cites and towns across the Commonwealth, we need to provide real help, not gimmicks. We need solutions that work, not meaningless press releases and grandstanding.

So what does real help look like? It looks like the unbreakable partnership Democrats in the Legislature have fostered with communities for the last decade.

This year alone, $935 million will be given to cites and towns as unrestricted local aid through the Lottery Fund in addition to $3.726 billion in Chapter 70 education funding plus over $465 million in non-chapter 70 education funds. That alone is more than $5 billion - yes, billion. Add to that another $379 million in unrestricted "Additional Assistance" funds, $28 million Payment in Lieu of Taxes aid and $37.5 million in local public safety grants. That does not count the over $5 billion given to cities and towns to help build and renovate their schools over the last three years.

The Democratic majority in the Legislature has made sustainable support for cities and towns its most important priority and has delivered on that promise.

As we move into what most experts agree will be a difficult budget year, that partnership will remain strong and will give communities honest support that goes far beyond political gamesmanship to produce real results.

Robert A. DeLeo, D-Winthrop, is a state representative serving as chairman of the House Committee on Ways and Means.

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